Stock market volatility 'rigged, says whistleblower

Consistent with claims by professor of finance at University of Texas

Published: 02/13/2018 at 3:12 PM

(MARKETWATCH) — One of the most popular measures of volatility is being manipulated, charges one individual who submitted a letter anonymously to the Securities and Exchange Commission and the Commodity Futures Trading Commission.

The letter makes the claim to regulators that fake quotes for the S&P 500 index SPX, +0.21% are skewing levels of the Cboe Volatility Index VIX, -1.29% which reflects bearish and bullish options bets 30-days in the future on the S&P 500 to gauge implied stock-market volatility (see excerpt from the letter below).